Mr. Speaker, first of all, I want to thank the members who have participated in this debate and no doubt it is an important one. This issue is an ongoing theme of concern. It is probably the biggest and most important bone of contention for Canadians as we head into the summer. Already brokerage houses and those who are whetting the appetites of shareholders across the country are suggesting that this year's hurricane season will probably see gasoline prices in the vicinity of $1.30. That kind of speculation well in advance of any real facts is a demonstration of just how perverse the industry has become and how detrimental it is to the lives of ordinary Canadians.
We heard the hon. Minister of Natural Resources refer to the fact that he is looking for options for Canadians to conserve and to better equip themselves, yet he is the minister who cancelled the EnerGuide program, notwithstanding the fact that only 23 weeks ago, before the election and while the Conservative Party was in opposition, that party unanimously supported Bill C-66. That bill propositioned by members on this side gave rebates to people who needed to find ways to offset the cost of heating during a very difficult time during the winter. The minister cancelled the EnerGuide program. That affected thousands, if not hundreds of thousands, of Canadians across the country.
What we have heard from the Conservative side, from that minister, is an inability to understand and appreciate the dimensions of what he is talking about and he is doing it in a way that is extremely detrimental to Canadians as they try to make ends meet. This is a nation that has been blessed with resources and for which taxes over the years have gone not only to build an infrastructure in the east, north and the west but also to ensure that Canadians would have self-sufficiency.
I understand the hon. member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup who proposed the motion. I have worked with him on a number of things. Like him, and like the minister, we might actually agree that we want a market solution, but the market solution is now different because we have to understand what the market is actually doing today.
The market right now is highly concentrated. I do not just say that. The minister's own department knows it. The market right now sees the example of where at about 4 o'clock every day in every major city across the country, wholesale prices are going to be adjusted to identical wholesale prices. If the taxes are the same, the wholesale price for gasoline is the same and we hear reports about what crude prices are going to be on a 15 minute basis on every radio and television station that has a business report, the answer as to what the price of gas ought to be is very predictable, yet the government refuses to understand the information of passing that on to Canadians. A simple price monitoring agency, not to repeal or to have some kind of power of telling the business what to do, but to let Canadians know on a daily basis would be helpful.
For this reason, I have to say that the Bloc member's remarks are important and necessary. This is why the Liberal government supported the creation of such an agency in October 2005. It was to meet the needs and standards of Canadians and to monitor price changes.
Not only did we establish the agency, but we also focused on a transparent process, initiated in an objective manner.
Unfortunately, we learn now that this government did not set the agency in motion. There may be a few people working there, but from what I learned yesterday, their information comes from a firm that works for the oil companies.
I know that the company that Natural Resources Canada and others rely on is a very good one. I have met Michael Ervin. He is a great fellow and his company is very honourable.
However, when the government talks a great deal about accountability and transparency, it cannot just stop on the political side. It has to do it in this industry in particular, because Canadians want the truth. They want objective information. If the price of gasoline tomorrow jumps 2.6¢ a litre in a given region, we need to know why.
Above all, if the hon. member's proposal were put in place it would help to explain to Canadians accurately here and now why it is that on any given day the wholesale price in Toronto, Montreal, or Vancouver is anywhere from 4¢ to 6¢ a litre above the wholesale prices in the United States.
The hon. minister may tell us to look at the reference prices. As we heard from Natural Resources Canada yesterday in a briefing, we are comparing Toronto, a market of five million people, to Buffalo, a market of 400,000 which does not even have a refinery and for which the standards of gas are completely different. That is the doublespeak that is going on in the department. It is time that the department were reined in and understood and provided for itself and for Canadians some of the information out there to make its comments more objective.
For that reason, I support the hon. member's initiative when it comes to the creation of what he calls the petroleum monitoring agency, which we, as Liberals, were putting together. Unfortunately, we were defeated by all the parties in a motion on petroleum pricing information.
Where are we today with respect to Canada's standing in the world as it relates to gasoline prices? We have seen, and this is proven, a tremendous decline in the number of refineries in Canada. This is not just something that we, as Liberals, found out was troublesome in 1998. The Progressive Conservatives in Ontario under former premier Mike Harris came to that conclusion. There is a tremendous decline that will hurt the marketplace.
When there are one or two players who do not compete against each other in a local or regional market, the price can be anything they want. Independents, as we have heard from the minister, have no play. All they have is a 4¢ a litre margin, except in the province of Quebec. That margin of 4¢ to 5¢ a litre within a few hours, which it takes for independent gasoline retailers to turn on their pumps, is completely gone.
Is it any wonder that we have seen a tremendous decline in the true number of independents, branded or otherwise. They are simply price takers. We know full well that independents are selling gasoline with that 4¢ margin above the wholesale price that is given to them and they have to pay cash and do all these wonderful things. They are selling gasoline today in Ottawa for 92¢ a litre. The company that sold to them, PetroCan, Shell, Imperial, whatever the case may be, is selling it for 92¢ a litre, but the take home price is 96¢. How can they meet the price of the wholesaler when the wholesaler is selling gasoline at a retail level below the independents' wholesale cost?
There has not been an objective spotlight put on the practices of this industry. I do not just point this industry out as different from any other industry. We have seen concentration in the grocery industry. We have seen concentration in the drug industry.
All of those things took place, not because of what the hon. member talked about, a national energy program 26 years ago, but because we have a Competition Act that was created in 1986. Peter C. Newman put it quite well. The Competition Act was written by the very people that it was meant to police. Lawyers representing the largest companies in this country, particularly the oil companies, had an uneven hand in creating the Competition Act.
Why was the Minister of Natural Resources talking a little earlier about seven or eight investigations by the Competition Bureau, saying that it has come up with no evidence of any kind of conspiracy or collusion? Simply put, and why we needed an amendment to the Competition Act is that the test to determine something to be conspiratorial, the test to determine something to be price fixing, is that not only must one prove it has happened, but one must also prove intent. One must also prove there has been a substantial lessening of competition and that it was done on an even further test, unduly.
We do not need conspiracy and collusion when there are three or four players who do not compete against each other at the wholesale level. As I said earlier, that price is set on any given day. Members should come talk to me at 4 o'clock in the afternoon and I will tell them exactly what the wholesale price is here in the Ottawa region or any place across the country. That is what the government could do.
In the meantime, to say that the Competition Bureau has found no evidence of any wrongdoing is a little strange and it must be put in its proper perspective. Under Bill C-19, proposed by the Liberal government and opposed by Conservative members, the Competition Bureau and onlookers agreed that we needed to look at criminal provisions dealing with price discrimination, predatory pricing, discriminatory promotional allowances, geographic price discrimination and that they be turned into civil remedies.
I do not want to throw these people in jail, but the law was created in such a way that the test would be so high to find an error or a malpractice within the industry that it would be impossible to prove. It may happen on a prima facie basis, but what we as Liberals called for and what the industry committee called for in 2002 was to amend those particular instruments.
In 1996-97 one of the first bills I presented in the House created an uproar, but the idea was to ensure that if I had a small business I could challenge those fat 14¢, 15¢, 16¢ a litre wholesale prices and drop them down 2¢ or 3¢ and compete against the refiners. What would be the outcome of that? The fact is there is no protection under the law for an aggressive, young, new mom and pop entrants to come in and hammer those refinery margins down.
We have seen a tremendous decline in the number of refiners in Canada to the point where the price is what we see today. One litre in every province or region sets the price at a certain point at four o'clock in the afternoon and the others simply follow. Why? Not because it is collusion or conspiracy but because they share a product.
Not only do they share a product, but in my city of Toronto taxpayers pay millions of dollars for energy self-sufficiency to run crude from Alberta all the way back to Montreal, and members will remember the Ottawa Valley agreement of the 1950s. Everyone's parents and seniors have been cut off the EnerGuide program by the callous government. These people cannot make ends meet.
That infrastructure was created by the Government of Canada to help the private sector, to help the west and other areas of the country create a made at home industry. We did not disagree with that back then. It was important to ensure that the pipeline would bring crude from the west to the east, but that has now been reversed.
We have no refineries left in Toronto. From an environmental point of view, I am sure some are saying that is a good thing. However, as a result of that the price difference before tax from Montreal to Toronto is 2.1¢ a litre and 5¢ a litre above the United States price. My constituents are being hosed, but they are not being hosed by the oil industry. They are being hosed by a complicit Competition Bureau and its advocates, and defenders who will not allow new small entrants into this business either as independents at the retail level or at the wholesale level. When is the last time we saw that happen?
The hon. minister is from British Columbia where four years ago ARCO came in and said it did not matter what the price of gasoline was, it was going to drop it well below wholesale. How many people can stay in business when the price at which they buy wholesale is higher than the price from their own wholesaler who just sold them the gasoline? No one is going to stay in business. That is exactly what happened. By all intents and purposes, that is predatory pricing. Unfortunately, the test for proving predatory pricing is a criminal one and impossible to prove.
In 1998 one of the things that came back to us from the Competition Bureau then was that it had a few convictions on predatory pricing. I thought that was great, maybe we would hear about a large company it went after and charged, but no, it was a driving school in Quebec which had put its prices at a different level and basically gave up, threw up its hands and said “okay, you got me, that's fine”.
It is one thing to have effective laws in this country to promote competition, to promote small business, and to promote the enrichment of Canadians based on our resources. We can do that from a private sector perspective. We do not need to go down the road of bringing all sorts of regulation intrusion.
I do not believe in regulation because over time people tend to pay more for that and in addition, it is within a provincial jurisdiction. Where the federal government has a role or has a responsibility and where it has the ability to respond to the concerns of hard pressed Canadians is addressed in the Competition Act. I also agree with the member who proposed this motion on that front.
I would be remiss, however, if I were not to point out that some of us are trying to cash in on the tax issue. Taxes are an important part of the structure of gasoline. So it comes to me as a bit disheartening. For many years I pointed this out. I wrote a report in 1998 saying that the federal government should not be putting a tax on tax. This came from the report that my colleagues, 51 of us, did back in 1997-98. The member for Mississauga South was the vice-chair of that committee.
It comes as a bit of a shock and a disappointment when those who talk about reducing taxes, and therefore motorists will be better off for it, suddenly change their mind and say they will not go ahead with their plan, as the Prime Minister did, of reducing the GST to zero after the price of gasoline goes beyond 85¢. There is good reason for that. At $1.10 it is a 2¢ a litre decrease. The proposal they have in terms of dropping the GST comes to about 1¢, so there is a significant difference for many people when they are buying 50 to 100 litres of gasoline at any given time.
The Prime Minister knows that when he did that, he did that will the full cooperation of the Canadian Taxpayers' Federation. It has never been a fan of mine and I appreciate the fact that it has copied some of my thoughts with respect to the tax on tax and removing the 1.5¢ a litre which is what I suggested at the time. It was because we could not give it back to the oil industry and let it administer the tax cut.
New Brunswick learned that. Conservative and Liberal MPs in New Brunswick on a select committee on gasoline pricing concluded in 1996 that the 2¢ a litre gasoline price drop or tax cut they gave was simply absorbed by the industry. The consumer never saw the benefit.
Therefore, what we proposed was to use that to help Canadians by investing in public transit and new technologies, particularly the Ballard fuel cell. We have used it also to ensure that we could leverage a better response from a green perspective that Canadians would receive this, particularly those who are hard pressed. Not once but twice was this party responsible for getting rebates to Canadians who needed it the most.
While there were errors in terms of how we administered this, the intent and the purpose was to ensure that Canadians would receive the benefits due to higher appreciated costs for energy that went into government for which the government had no business collecting.
That is why it is kind of strange to hear the natural resources minister talk so much about how he cares about the poor and how he cares about the environment in the private sector, and yet, he cut the most significant program which he agreed with only 22 weeks ago. It was actually helping Canadians make ends meet, upgrade their homes, and ensure that Canadians understood that we all have a responsibility. It is not just because it is a question of how taxpayers' money is spent. The hon. member talked about the fact that 50% was going to some kind of organization for audits.
Not only is that number of 50% false, it is more like 12%. I find it passing strange, given what I recall the hon. member for St. John's East saying that we need to have such a system in place to ensure it was accountable and demanded that the government of the day in 2003, with respect to EnerGuide, should put that in place. Now the hon. minister is looking for excuses and he is flush with cash. He has plenty of money coming out not just in terms of energy resources. Therefore, I understand the frustration of the hon. member who has proposed the motion in terms of the surtax and I will discuss it in a moment, but I think he is going about it in the wrong way.
This issue has been before the House for a very long time. I hear from many in my own constituency who say “After railing against this for so many years, why do you keep doing it?” Before Bill C-19 was proposed in 2004, there were seven years of fighting everyone, including corporate Canada, and including many of those who were the defenders in the various papers across the country. I do not need to mention names, but Matthew Ingram and Terence Corcoran to name just a few come to mind.
We have proven that there is a need and that there is evidence that within the structure of the gasoline industry there remains a very dangerous, near monopoly situation that does not help Canadians and the proof is evident. We have higher prices and added taxes for gasoline that are well over the United States for similar gasoline, and of course we now see the evidence within microseconds of companies that simply follow the wholesale price because there is such a concentration in many areas. We understand this.
However, what we cannot do and what I hope we will not do is go down the road of taxing so-called profits for one particular industry. I have never agreed with that. Colleagues in my party may think it has some validity, but I think we have to be very careful.
Whatever we tax this industry with will only come back to hurt consumers in the long run. The tax can be better applied if for instance the hon. member were to look at an amendment that might consider different exchanges on royalties in terms of how much we would take and not just at the crude level. Obviously the hon. member does not distinguish that, but I think he is trying to do something at the refinery level as well.
I have spoken to many of the independent gas retailers, the few that are left, not the 70% exaggeration that we heard from the Minister of Natural Resources. He is not here to respond to that and I hope perhaps he will be. It is important for us to really understand that the Competition Act, as everyone agrees, needs to be amended in a number of substantial ways. It cannot simply be left because someone turns around and says that we are bringing back the shibboleth of the national energy program.
My party agrees with the principles that have been established by the member who has proposed this motion.
I can tell the hon. member that notwithstanding the fact that I tried to put forward a tiny amendment to bring back Bill C-19 that we all tend to agree with, with some exceptions, the one thing that is impossible for the Liberal Party to accept is a surtax on the industry because we think it will boomerang and hurt consumers in the long run.
If the member can somehow work that out, I believe an agreement could be reached. It pains me to say this because there are many aspects of this motion that I do agree with. I agree with two out of three of his proposals, but the third proposal that he has made is not acceptable and for that reason the Liberal Party will not be supporting this motion.
Let me be perfectly clear to every Canadian that this industry is sick, but it is not sick because of its practices. It is sick because of the behaviour that is allowed under the Competition Act, which needs to be amended. It was written by the very people it was meant to police and Canadians deserve better. We should not be receiving protection as consumers vicariously because of what happens in other jurisdictions around the world. We do not want to fight region to region.
When I was in Alberta and talked about problems at the refinery level, Albertans agreed. They know that when small businesses are not allowed an opportunity to flourish, as we see with independent retailers of gasoline, that is wrong. The government has an obligation to work with everybody here to ensure we fix the problem with respect to the Competition Act and restore the price monitoring agency.
